CONSIGNED EXCESS INVENTORY ADDENDUM TO MASTER MANUFACTURING SERVICES AGREEMENT (Trimble Consigned Excess for Guadalajara Factory)
Exhibit
10.1
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[***]
Denotes language for which the Company has requested confidential
treatment pursuant to the rules and regulations of the Securities Exchange
Act of 1934, as amended
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CONSIGNED
EXCESS INVENTORY ADDENDUM
TO
MASTER MANUFACTURING SERVICES AGREEMENT
(Trimble
Consigned Excess for Guadalajara Factory)
This
Addendum to the Master Manufacturing Services Agreement dated March 12, 2004 (
“MSA”) by and between Xxxxxxx Navigation Limited, the predecessor in interest to
Xxxxxxx Europe B.V. (“Trimble”) and Solectron Corporation, the predecessor in
interest to Flextronics Corporation (“Flextronics”), is made by and between
Trimble and Flextronics as of this 6th day of July 2009 (“Effective
Date”). Capitalized terms not otherwise defined herein shall have the
same meanings as ascribed thereto in the MSA. Except as modified
herein, all terms and conditions in the MSA shall remain unaffected and continue
in full force and effect for the duration thereof.
WHEREAS,
the parties contemplated an excess inventory management program in the
MSA;
WHEREAS,
the parties desire specifically to address the management of such excess
inventory at Flextronics’s factory located in Guadalajara, MX; and
WHEREAS,
the parties desires to set forth additional terms and conditions to further
describe their mutual agreement on such management plan;
AND NOW,
intending to be legally bound, the parties hereby agree as follows:
1.
Inventory
Threshold. If the dollar amount of Trimble Consigned Excess
(“TCE”), as measured at Flextronics factory in Guadalajara, Mexico, is equal to
or greater than [***], then Flextronics, at its option, may elect to manage the
TCE via [***], the selection of which is to be mutually agreed upon by the
parties, or within Flextronics’s own premises. In either event,
Trimble agrees to [***] as identified in Section 2A. Under no
circumstances, without a prior signed mutual agreement, will Flextronics be
required to hold more than a sliding maximum scale of TCE inventory. The sliding
maximum TCE inventory scale will be [***] respectively.
2.
Administration and Management
Plan:
A. Purchase Orders, Invoices and
Pricing: For any excess inventory arising out of the
Guadalajara factory after an excess material review that satisfies the terms for
Excess Inventory in the MSA, Trimble shall place a purchase order to Flextronics
for the [***] to enter the material into TCE storage. For any amount
of TCE above [***] to be mutually agreed by the parties, for storage of such TCE
on pallets above the [***] at the 3PL or Flextronics warehouse.
B.
Implementation:
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[***]
Denotes language for which the Company has requested confidential
treatment pursuant to the rules and regulations of the Securities Exchange
Act of 1934, as amended
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x.
Xxxxxxx will issue a purchase order to Flextronics
[***] for mutually agreed to Excess Inventory quantities at [***] as defined in
Section 9.0 of the MSA plus a [***]. The Excess Inventory will then be placed
into TCE storage
ii.
Flextronics will receive and manage such
components either at a Flextronics facility or a 3PL.
.
iii. Any
such components shall remain on Xxxxxxx’x accounting and financial reporting
documents until consumed and paid for by Flextronics per the reconciliation
process below:
iv. Flextronics
will provide a PO [***] to Trimble each month based upon a reconciled
consumption report. Trimble will not invoice Flextronics for Material until the
monthly reconciliation is performed and Flextronics provides a consumption
report and Purchase Order;
v. Inspection and Audit
Rights: Flextronics shall allow Trimble to inspect and review
TCE managed on Flextronics’s premises. Such inspection and review
rights shall be limited to the right of Trimble personnel or Trimble designated
personnel to perform cycle counts and review transaction records upon providing
Flextronics with [***] notice, but in any case not less than [***] business
days.
C.
Reconciliation Process:
i.
Flextronics shall provide Trimble with a monthly report
of the TCE being managed on Flextronics’s premises and/or in a
3PL. Each report shall reflect the [***] in storage at the 3PL and
the number of TCE pallets at Flextronics facility. Flextronics will
provide a consumption report and issue a Purchase Order for the consumption
quantity at the Quarterly Budget Price to Trimble the second to last Friday of
each Xxxxxxx’x Fiscal Month. Payment terms shall be [***] days
from date of invoice.
ii.
TCE Reconciliation Example:
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Month
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Beginning
TCE Balance
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TCE
Adds/Subs
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Ending
TCE Balance
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TCE
Consumption
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Notes
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0
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0
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0
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0
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0
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1
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0
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200
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200
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0
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Trimble
Transfers 200 Units during Month 1
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2
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200
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0
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100
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100
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Trimble
invoices 100 unit TCE consumption
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3
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100
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200
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200
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100
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Trimble
transfers 200 units during month 3 and invoices 100 unit TCE
consumption
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4
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200
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100
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100
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Trimble
invoices 100 unit consumption
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|
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5
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100
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0
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100
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0
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|
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6
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100
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-100
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0
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0
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Flextronics
notifies Trimble of excess TCE asset inventory. Trimble issues handling
cost PO and Flextronics dispositions inventory per Trimble
direction.
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[***]
Denotes language for which the Company has requested confidential
treatment pursuant to the rules and regulations of the Securities Exchange
Act of 1934, as amended
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D. Reviews: On a
[***] basis, Flextronics will identify all TCE inventory that has had no
transaction activity in the [***] and the quantity on-hand is Excess Inventory
to the current forecast. Such TCE must be either consumed or removed from
Flextronics no later than [***] in order to meet the [***] aging limit. Trimble
will have the responsibility to consume or disposition such material (“Trimble
Consigned Obsolete Inventory” or “TCOI”) by placing a PO to Flextronics for
consumption or removal within [***] after such notice by
Flextronics. Flextronics may also request Trimble to place a purchase
order for delivery or consumption of TCE in [***] for any quantity of TCE that
would permit Flextronics to reduce its storage capacity requirement, inactivity,
duration held, date code expiration or repetitive push-out of demand; and
Trimble may agree to this in its sole discretion.
E. Inventory
Disposition: Trimble may request, in writing, Flextronics to
return, scrap or perform some alternative form of disposition with respect to
any TCE within [***] of such request or notice. For each request
(which may include one or more components) Flextronics will charge [***] to be
paid by Trimble [***] during the reconciliation process. Trimble
shall be responsible for any and all taxes payable by Flextronics in connection
with the requested action referenced in this paragraph E within [***] of
Flextronics’s incurring such taxes. Any TCE to be shipped to Trimble
or its designee shall be delivered to Trimble F.C.A. (Incoterms 2000)
Flextronics’s and/or the applicable 3PL facility. Any TCE originating
from or physically located at the Flextronics Guadalajara facility or 3PL
located within Mexico cannot be re-sold within the borders of the country of
Mexico.
4.
Term
and Termination. Section 24.0 of the MSA shall apply with
respect to the term, expiration and termination allowances related hereto, with
the sole exception of Section 24.4, which is modified exclusively as it relates
to this Addendum to extend the notice of termination for convenience from 90
days to 180 days.
5.
Except as specifically amended by the terms of this Addendum, all
other terms and conditions of the MSA shall remain in full force and
effect. Without limiting the generality of the foregoing, the
following sections of the MSA shall apply to this Addendum and the management of
TCE hereunder: Sections 11.2 and 16.2 (regarding liability for loss or damage to
consigned inventory); Sections 11.3, 11.4, 11.6 and 16.2 (regarding title to
Consigned Material remaining in Trimble); and Sections 11.5 and 16.3 (regarding
Flextronics using commercially reasonable efforts to maintain secure facilities
to store consigned inventory, providing “all risk” insurance and granting
Trimble audit and inspection rights).
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[***]
Denotes language for which the Company has requested confidential
treatment pursuant to the rules and regulations of the Securities Exchange
Act of 1934, as amended
|
6.
This Addendum may be executed in any number of counterparts, each of which
when executed and delivered shall be deemed an original, and such counterparts
together shall constitute one and the same instrument. For the purposes hereof,
a facsimile copy of this Addendum including the signature pages hereto, shall be
deemed an original.
IN
WITNESS WHEREOF, the parties, through their duly authorized officers, have
executed this Addendum, effective as of the date first set forth
above.
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TRIMBLE
EUROPE B.V.
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FLEXTRONICS
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/s/
ABM Snijders
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/s/
XX Xxxxx
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Name:
ABM Snijders
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Name: XX
Xxxxx
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Date:
July 2, 2009
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Date: July 0,
0000
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/x/
XXX xxx Xxxxxxxxxx
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Name:
WJA van Kollenburg
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Date:
July 2, 2009
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